Zomato Negotiates Purchase of Paytm’s Entertainment Unit

Zomato and Paytm are in the midst of negotiations to acquire Paytm’s entertainment division. The size of the deal is yet to be confirmed, but it is estimated to be around Rs. 1,500 crores to Rs. 2,000 crores. This strategic move could significantly bolster Zomato’s presence in the tech and entertainment industry, providing a new dimension to its business model.

Both companies have confirmed the ongoing development. Zomato made these statements in their exchange filing, ‘We acknowledge that we are in discussions with Paytm for the aforementioned transaction, however, no binding decision has been taken at this stage that would warrant a Board approval and subsequent disclosure in accordance with applicable law.”  Further, Paytm also affirmed that in a separate regulatory filing, “The Company routinely explores various strategic opportunities aimed at enhancing shareholder value. The potential transfer of Paytm’s Entertainment business, a component of our Marketing Services, is one opportunity under consideration.” They also added, “As noted in our earnings call, our focus will be on payment and financial services along with digital goods commerce, which are designed to help our merchants scale their businesses.

This potential acquisition would mark Zomato’s second-largest after their Blinkit deal, which was valued at over 4,000 crores. Deepinder Goyal, co-founder and CEO of Zomato, has stated that this move is part of their strategy to fortify their positions in the event business and to compete with established players like BookMyShow, a clear indication of their long-term business vision. 
Zomato mentioned in the filing, “The above-mentioned discussion is being undertaken with an intent to further strengthen our going-out business and is in line with our stated position of focusing only on our four key businesses currently.

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